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Working paper

Социальная эффективность государства в регионах России: 2008 - 2011 гг.

We address the problem of public sector effi ciency in Russian regions by applying Data Envelopment Analysis (DEA). The main quantitative outcome of the study is the set of “social effi ciency” estimations based upon DEA scores. The latter are calculated for the following public sector areas: healthcare, security, education, housing and communal services, employment and poverty reduction. The returns to scale are supposed to be variable, all inputs are monetary (budget expenditures), product possibility frontier is the single one for the whole time period evaluated (2008 – 2011). We consider both inputoriented and output-oriented effi ciency scores to be equally important. Special attention is paid to the problem of effi ciency scores’ validity. The severity of this problem originates in grand-scale heterogeneity and diversity of Russian regions. To reduce the impact of exogenous factors (such as huge variety in transport infrastructure and climate conditions) on effi ciency scores, we examine a number of techniques. They are regression analysis, Metafrontier and multistage DEA. The best correction result, however, is achieved by relatively simple approach: division of monetary inputs by Budget Expenditure Indexes (BEI). BEI values are provided by Russian Ministry of Finance; the index is especially designed to take into account territorial differences. The separate task is to analyze the effi ciency dynamics of Russian regions. Effi ciency scores for different years from 2008 to 2011 are comparable due to the single product possibility frontier for the whole time-series-cross-section data set. That makes possible to take the fi rst differences and calculate weighted sums (for input-effi ciency and output effi ciency scores separately). The alternative methodology developed by the author is to consider the dynamics of each region as a trajectory in a state space with two dimensions: input effi ciency and output effi ciency rates. We propose the adopted formal tools to present this evaluation as a scalar value.